Optima has admitted to the Australian Competition and Consumer Commission (ACCC) that it had engaged in resale price maintenance.
Under section 48 of the Trade Practices Act 1974, a supplier cannot require a business customer to sell the supplier's goods at a minimum price specified by the supplier. To do so would limit the ability of the business customer to advertise discounts for the products, which is essential for retailers and others who wish to engage in price competition.
In response to an ACCC investigation, Optima admitted it had told two of its dealers they should stop discounting and raise the prices on Optima computers to the vendor's recommended retail prices. The dealers were threatened with having the supply of Optima products withheld or their dealership cancelled.
The ACCC has accepted court-enforceable undertakings from Optima to meet its concerns that it had breached the Act.
Optima has undertaken that it will; not engage in resale price maintenance for a period of three years, implement a trade practices law compliance program, and implement an audit process to determine whether any other Optima dealers have been subjected to resale price maintenance.
The computer supplier will also write to all of its dealers to; advise the of the outcome of the ACCC's investigation, of their freedom to set their own prices for Optima products, and that they should not place pressure on other dealers who offer discounted prices on Optima products, and should not seek to induce it to take action against dealers who offer discounted prices.
In a separate matter, the ACCC has also raised concerns about aspects of comparative advertising by home entertainment retailer JB Hi-Fi Group, which could lead to ACCC accepting court-enforceable undertakings.
ACCC chairman, Graeme Samuel said the ACCC was concerned about representations in a catalogue distributed in February/March this year.
"The catalogue included 45 home entertainment products advertised at a discount represented as a saving of a nominated sum off each product's recommended retail price,” he said.
The ACCC argues that the discounted price may have in fact been the normal price of the products, and thus may have been a misrepresentation equating to false or misleading advertising in breach of the consumer protection provisions of the Trade Practices Act 1974.
The 'discounted' products included televisions, DVD/VCR combos, DVD recorders, receivers, home theatre systems, speakers and video cameras.
JB Hi-Fi believes it was entitled to make the representations but has acknowledged the ACCC's concerns.
In response to the ACCC's concerns, the retailer has agreed it will not advertise any product with a discount off its recommended retail price unless the product was advertised and sold at that price in the same markets, in reasonable quantities for a reasonable period of time and within a reasonable period of the date of the advertising, and will establish and implement a trade practices law compliance program on the relevant consumer protection provisions of the Act.
Optima admits to price fixing; JB Hi-Fi queried
By Lilia Guan on Dec 8, 2006 9:38AM